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How Modern Insurance Technology Can Save Time for Agents and Brokers
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Insurance agents and brokers are talented multitaskers who help customers find valuable policies that protect their most important assets. Unfortunately, agents are often buried in administrative work like filling out forms, general data entry and following up with underwriters. These outdated methods for collecting and using data can make insurance sales feel like a cumbersome task that is equally frustrating for customers. As consumers turn to digital technology for improved convenience and streamlined processes, it's time for insurance companies to embrace the digital transformation or risk being left behind.
By implementing new technology designed for the insurance industry, insurance agents and brokers can centralize workflows, streamline sales processes, and improve communications with prospects and customers. Modern insurance technology streamlines and synchronizes processes to provide faster results and improved customer service.
What Is Insurance Technology?
Insurance technology uses emerging technologies by insurance organizations to improve business processes and increase efficiency, providing a better customer experience. While insurance carriers have always invested in modern technology like automation for back-office functions, the customer-facing side of the industry has been largely manual. Today, tech adoption by consumers is at an all-time high. Fueled in part by the continual emergence of convenient tech trends and largely by necessity due to pandemic restrictions, consumers of all ages expect modern digital technology to streamline every customer experience.
The expectation isn't a surprise to insurance executives. In fact, 81% of insurers acknowledge that technology has become an inextricable part of the human experience. While most insurance providers have long depended on legacy systems for customer-facing services, emerging technology trends bring the exciting potential for streamlined, convenient insurance solutions that consistently adapt to customers' needs.
Technology Trends: What is Insurtech
Technology strategies designed to offer consumers a convenient digital experience have moved beyond online shopping and into industries that have long been considered in-person ventures. When COVID restrictions forced businesses and organizations to find remote solutions to meet their customers' needs, rapid tech adoption expanded into the insurance and financial industries in the form of insurtech and fintech.
Insurtech: A meeting of the words insurance and technology, insurtech is a similar concept that describes the use of digital tools to sell insurance products.
While these technology trends promise to eliminate cumbersome processes and offer instant service at a lower price point, startups often don't have the same brand recognition and reputation as long-standing industry professionals. Furthermore, while digital-only options address long-standing issues, early models often lack some of the services of their physical counterparts. Yet, when technologies used by fintech and insurtech startups are implemented into the workflows of traditional financial institutions and insurance agencies, customers get the best of both worlds.
Internal Workflow Automation
When you consider that getting insurance quotes at the click of a button is possible, it's easy to see that insurance technology isn't new to the Property and Casualty insurance industry. However, emerging technology promises advanced maturity that will automate internal workflows within insurance agencies in several ways.
RPA and Machine Learning in the Insurance Industry
Documentation has always been an essential part of how insurance works. Yet, paperwork is monotonous. Automation allows companies to cut costs by eliminating manual tasks that take hours for agents to complete. When repetitive tasks are completed by machines, full-time staff members can shift their focus toward creative projects and customer interactions.
The automation of payout calculation at Fukota Mutual Life Insurance provides a notable example of reducing costs with automation derived from machine learning. The company has a new CEO who said he was able to reduce costs for his company based in Los Altos. AI technology is expected to save around $125 million by 2020.
The biggest drawback of AI for insurance companies is the heavy investment in a product that requires data input to successfully prep algorithms for use. Robotic process automation (RPA) offers automation that doesn't always involve machine learning but can address routine and repetitive work with human-designed rules.
Redefining Traditional Ways of Claims and Policy Management- Automation of Claims Processing
In addition to automation by AI, the claim management sector is dominated by specialized solutions. The claims management system is crucial for every insurance firm.. The software helps remove manual workflows and interactions from one person to another, resulting in benefits for both the customer and insurer. It's easier and faster for clients to file a claim and go through the process to reach compensation. From the insurer's perspective, automation of claims processing reduces manual data collection and labor costs.
Policy management in insurance is a document-heavy process that can be burdensome for insurers and confusing for customers. . A commercial insurance policy can be a 200 or 300 PDF document that offers clients little insight into the policy they purchased. The renewal process for such a policy often requires customers to fill out applications that repeat the same questions. Automating the process eliminates work for both customers and insurers.
Digitizing Paper Records with Optical Character Recognition
On the other hand, there are inbound correspondence and documents. The bank processing and collecting millions of records on the internet over the course of days doesn't work well for information management. It also does little about protecting the environment. In cases where the data is digitized and stored in cloud archival systems, the documents will be reviewed and automatically rejected. Customer data that collected dust from archival papers in the past decade are now no longer used in calculating profit-and-loss statements.
Optical character recognition (OCR) algorithms translate customer data into usable information that provides insight into your customers' needs. OCR technologies are also used to translate data into structured, usable records without time-consuming manual processes.
Faster Declaration Pages with InsurGrid
After eight years of selling P&C lines of insurance, Matt Gardner realized the traditional quote process inundated his clients with document digging and slowed the time to close. Sea to Sky Insurance revolutionized its quote process and closed an extra $60,000 within the first three weeks of using InsurGrid.
New technology can make buying insurance effortless for your clients. InsurGrid connects insurance accounts and provides insurance agents with the policy data needed to prepare a new quote. Searching for dec pages can be time-consuming and prolongs the time from contact to conversion. By using InsurGrid, agents can collect dec pages by text, email, or even scanning a QR code. This results in a better client experience, higher sales conversions, and improved retention.
Disruptive Business Models: P2P Insurance
The peer-to-peer insurance industry is one of the most disrupting business models and is quickly becoming popular due to the availability of technology. The most significant difference between P2P insurance models and all other insurance types is the lack of traditional insurance companies. The model works by gathering a network of people who agree to cover similar risks by creating a single fund pool containing its share price and premiums. After each coverage period, the remaining funds are refunded. The model allows customers to minimize their costs and mitigate claim conflicts. Nevertheless, the model has several drawbacks ranging from fraudulent sensitivity to ethical issues.
Insurance Blockchain Disrupts Reinsurance Operations
Blockchain has the potential to save $5-$10 billion in costs for insurers worldwide. Although most people think of the cryptocurrency Bitcoin when they hear the word blockchain, the technology has the potential to change the process of reinsurance drastically. Blockchain ledgers are tamper-proof 'blocks" of records that can be shared among multiple users. Reinsurance is a chain-oriented business. Despite its popularity as one of the most used ledger applications in fintech, it is a recurring problem for many users. When blockchain is used, the insurer no longer has to interact with clients to retrieve customer information for renewal. For instance, instead of verifying several insured events for one reinsurance contract, blockchain creates a smart contract that allows the insurer to get direct access to the data. The result is reduced verification time, eliminating errors, and minimizing reputational hazards.
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Conversational Interfaces Power Virtual Agents, Brokers, and Insurance Executives
All insurance industry sectors require a high level of customer support to assist in the decision-making process, provide information, and improve the customer experience. To provide individuals with this high level of support, insurance agents spend thousands of hours a year assisting clients. Insurers can significantly reduce customer service costs by automating this tedious task with new technologies such as chatbots, reporting tools, and voice recognition algorithms.
Chatbots work as efficiently and effectively as large customer support service centers without the cost of hiring a team of full-time employees. Many insurers already have the technology.
Chatbots for Insurance Carriers
It's predicted that, by 2025, AI will power 95% of all customer interactions through tools like chatbots. Tools that interact with customers and chatbots use artificial intelligence (AI) and machine learning to communicate seamlessly with customers. A bot can guide a customer through a policy application procedure without help from insurance agents. For example, KATE of Geico is a mobile phone app available 24/7 to answer customer questions about policies or coverage through text or voice communication. As insurance businesses grow, the potential for chatbots will increase in the industry.
Insurance Marketplace Brings Product Distribution to Online Space
While there are times when people have to contact their insurance agent to buy insurance, the internet has increased awareness of the available options for customers to compare products, view testimonials, and find special offers suited to their individual needs. Insurance shops such as Insurify, Cloverhund, and Friendsurance are redefining distribution models by providing ways for clients to get more specific about what they're seeking. When insurance providers comply with the demand, they have the potential to gain more visibility. These models also help insurers reduce distribution costs and provide broader leads.
Meet Real Insurance Customer Needs with Tailored, Data-Driven Coverage
Telematics technology is now producing invaluable data for insurance companies. These innovative car insurance products get installed directly into a vehicle to gather and transmit data. Telematics technology brings measurable data into the industry in a way that can transform business operations. For instance, you can offer a more comprehensive policyholder experience by integrating individual insights into specialized products and coverages. Insurers can use the accuracy of the data to reward drivers for safe driving, increase costs for irresponsible drivers, and help the operator tailor coverage in less time.
Insurance APIs as an Easy Way to Innovate
Regulatory overload, old and outdated business models and lack of technical talent can stop innovation, negatively impacting customer service and business. Customers demand innovative experiences and are likely to abandon their current carriers because they don't want to change their service to meet customers' changing needs.
Insurance application programming interfaces (APIs) are software-based programmatic interfaces designed to address the insurer's inflexibility in allowing third-party insurers to share information and services. With this capability, companies have the opportunity to provide improved customer experience to customers.
Insurance Data Analytics
Accurate data is vital to the development and sales of insurance policies that align with consumer risks and approve covered claims. Insurance software that promotes data sharing and real-time data ingestion provides insurers with ways to streamline insurance sales and claims processes. For instance, data sources embedded in automobiles provide valuable driving data to influence individual car insurance rates and can combine analytics from multiple sources for a single source of truth.
Ingestion and Data Pipelines
According to an Accenture survey, about 50% of insurance executives think data analytics will improve business over time. The data analytics industry is ranked second to cloud-based software after cloud computing. However, the cloud has never been a disruptive technology but a basic enabler for digital transformation. In 2018, Deloitte noted that the numerous technological innovations driving disruptive change within the sector were largely isolated experiments with no specific value on the data or formula for gathering data and connecting to data sources. Modern technology addresses these issues with analytical tools and enablers designed to collect and distribute accurate data.
Predictive Analytics
Insurance firms commonly use predictive analytics to understand and predict future behavior. It has the potential to be used in new ways to improve the accuracy of data for pricing and risk selection, identifying fraud, and triaging claims.
Social Media Data
Social media has evolved beyond simple marketing and clever advertising. Mining social media data improves risk assessments for P&C insurers and enhances the customer experience. An excellent example of how social media can be used in insurance is how Kroodle Insurance in Holland interacts with customers. Customers can register on Facebook (using Facebook credentials) and request help or file claims through Facebook apps. Social media can also be used to detect fraudulent activity by insureds.
Artificial Intelligence (AI)
As technology evolves, AI is becoming increasingly commonplace across homes. A 2017 Deloitte report revealed that more than 35.6 million people in the US alone had voice-activated AI assistants and that globally, the technology was estimated to be around $48 billion by 2020. In 2021, Gartner predicted the worldwide AI software market would reach $62 billion in 2022.
How do insurers leverage these technologies? The consumer always seeks personal experience, especially with a product such as insurance. AI enables insurers to create unique experiences and meets the rapid needs of today's consumers.
Insurance Fraud Detection Software
Fraud is an extremely dangerous issue in the insurance industry and has become more widespread. Across the nation, insurers lose an estimated $85 billion a year based on alleged fraud. It accounts for an average of 5%-10% of the claims charge in the United States. Cloud technology addresses the issue of fraud by providing insurance professionals with real-time reports on the status of claims involving duplicate claims, fraudulent claims, fake dependent papers, and recurrent relapse.
Internet of Things (IoT)
The Internet of Things describes devices that transmit data through connected networks to help streamline traditionally manual processes and eliminate human error. The IoT can easily automate data sharing with other consumers and allow insurers to use automation to gather essential data. For example, insurance companies may employ data from smart home devices, car sensor devices, wearable devices, etc. Forecasts predict a global IoT insurance market value of $42.76 billion by 2022, suggesting the insurance sector shouldn't delay using IoT devices to increase its revenues.
Insurance Technology Improves the Insurance Sales Experience for Both Insurers and Customers
Modern insurance technology is changing the nature of insurance sales and renewals rapidly. While every type of insurance technology might not stick around to revolutionize the way the insurance industry works, many of these technologies will likely play a part in streamlining insurance processes. This new technology represents a much-needed change for agents and brokers to eliminate many of the cumbersome tasks that plague the industry. It will allow insurance professionals to focus more on the customer experience.
InsurGrid is a unique tool that allows clients to connect their insurance account with a simple link to collect dec pages within seconds. It speeds time to sale, improves the client experience, and improves customer retention. Sign up for an InsurGrid demo to see how you can revolutionize your quote process and quickly and efficiently onboard new customers.
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